SAN JOSE, Calif. —
Two antique dealers who ran a specialty financial service that supposedly used art as collateral have been charged in federal court in San Jose with carrying out a fraud in which they allegedly bilked investors out of $1.5 million.
Anthony Barreiro, 64, and Ernest Ray Parker, also known as Ray Parker Gaylord, 50, operated a San Francisco company called ARTLoan Financial Inc. They were also partners in an antique business, Charles Gaylord & Co., that was founded by Parker's father.
Both men are residents of both San Francisco and Dallas, according to U.S. Attorney Melinda Haag.
They were charged in an indictment issued under seal by a federal grand jury in September with 12 counts of conspiracy, mail fraud and wire fraud allegedly committed between 2008 and 2010.
The indictment was unsealed on Jan. 10 after they made an initial appearance in federal court in Dallas. The defendants, both of whom are free on bond, appeared before U.S. Magistrate Paul Grewal in San Jose today and are due to return to the court of U.S. Magistrate Howard Lloyd on Feb. 11 for identification of their defense lawyers.
The indictment alleges they told investors their funds were being used to lend money to collectors who wanted to buy valuable works of art and that ARTLoan Financial would hold the art as collateral.
In fact, the indictment contends, the two men did not use investors' money to fund any debt financing agreements, did not secure works of art as collateral and took some of the funds for themselves.
The indictment alleges that Barreiro and Parker obtained $3.4 million in investments. They allegedly diverted $1.5 million for their personal use and, in a so-called Ponzi scheme, made $1.8 million in purported interest and principal payments to lull their current investors and induce others to invest.
If convicted, the two men face sentences of up to 20 years in prison for each count. The not-yet-scheduled trial in the case has been assigned to U.S. District Judge Lucy Koh of San Jose.
Two antique dealers who ran a specialty financial service that supposedly used art as collateral have been charged in federal court in San Jose with carrying out a fraud in which they allegedly bilked investors out of $1.5 million.
Anthony Barreiro, 64, and Ernest Ray Parker, also known as Ray Parker Gaylord, 50, operated a San Francisco company called ARTLoan Financial Inc. They were also partners in an antique business, Charles Gaylord & Co., that was founded by Parker's father.
Both men are residents of both San Francisco and Dallas, according to U.S. Attorney Melinda Haag.
They were charged in an indictment issued under seal by a federal grand jury in September with 12 counts of conspiracy, mail fraud and wire fraud allegedly committed between 2008 and 2010.
The indictment was unsealed on Jan. 10 after they made an initial appearance in federal court in Dallas. The defendants, both of whom are free on bond, appeared before U.S. Magistrate Paul Grewal in San Jose today and are due to return to the court of U.S. Magistrate Howard Lloyd on Feb. 11 for identification of their defense lawyers.
The indictment alleges they told investors their funds were being used to lend money to collectors who wanted to buy valuable works of art and that ARTLoan Financial would hold the art as collateral.
In fact, the indictment contends, the two men did not use investors' money to fund any debt financing agreements, did not secure works of art as collateral and took some of the funds for themselves.
The indictment alleges that Barreiro and Parker obtained $3.4 million in investments. They allegedly diverted $1.5 million for their personal use and, in a so-called Ponzi scheme, made $1.8 million in purported interest and principal payments to lull their current investors and induce others to invest.
If convicted, the two men face sentences of up to 20 years in prison for each count. The not-yet-scheduled trial in the case has been assigned to U.S. District Judge Lucy Koh of San Jose.